Confessions of a benefits manager: Flawed performance

Tasked with rolling out a new performance management system, Candid fails to convince staff that the experience will be rewarding

Performance management isn’t really my thing. Technically, it falls under Creepy Caroline in the so-called talent team but, out of the blue, Big Bad Boss has decided it comes to me to roll out the new system. He says it is because our performance management is inextricably tied into the incentive scheme, which it is, but it is also a complicated mess right now. Thanks. I suspect this has come to me because, like many others in HR, Creepy Caroline is allergic to numbers. When faced with figures, she freezes in a bunny-in-the-headlights kind of way. She could no more present a bonus-rating scale than a discourse on calculus.

But really, I don’t want to do it. You see, apart from anything else, we are horribly late. How can we tell people about a new incentive and performance system when we are almost a quarter of the way through the year? And the only reason we are so late is because Big Bad Boss decided to fuss about with the formula even though it was working perfectly well as it was. I can be sure that whenever there is anything embarrassing and messy to do, Big Bad Boss will get me to do it.

My training sessions start with the Higher Beings, our executive management team. Gulp. Of course, they have the attention span of a group of toddlers, so I have to skinny down my presentation to just two slides, and even then I have lost most of them by the second page. Although this is supposed to be a top-down process, I know I am wasting my breath talking to them about managing performance. Last year we did a name-and-shame campaign on the naughty boys who had no agreed goals with their team. No prizes for guessing which managers were worst of all. As far as Higher Beings are concerned, performance management is just something you talk loudly about, not something you actually do.

After that, I shimmy over to the second floor to train the finance team. One of them is quite good looking, which perks me up a bit. However, they very quickly decide they don’t like the new system. Before, we had a straightforward formula: rating a gives a payout of x, rating b gives a payout of y, and so on. This worked very nicely for the finance guys, who like to know exactly where they are. Sadly, Big Bad Boss has insisted on ranges to provide more flexibility. Well, too much flexibility in reward leads to argy-bargy, in my experience.

Room of incredulous managers

Worse, the ranges are skewed to the high end, so now I have to tell a room of incredulous managers that our new payout range means that good performers can only get up to 95% of target. No matter how ‘good’ they are, they can’t get 100%; you have to be rated ‘excellent’ for that. I thought there was going to be a riot at that one. And it is no good me pointing out that it wasn’t my idea. Big Bad Boss tells me we are ‘one team’ and ‘one face of HR’. In other words, I have to stand behind his nonsense in public and take the flak.

One argument Big Bad Boss uses for these stupid ranges is that we are a high-performing company, so we expect the best performance from everyone. But that argument doesn’t hold up when you realise the total bonus budget is fixed at 100% payout. So, if you want to give anyone a bit more, you have to take it away from someone else, which means we can’t actually afford to have a consistently high-performing team. Another argument he gives is that Smarmy Consultants told us this is the way many other successful organisations have designed their bonus scheme. But many other successful organisations do all sorts of daft things. I am not prepared to present either argument to the finance guys; I want them to like me, especially that one at the back in the blue shirt.

Next, I move on to the sales department. Now I know sales guys like a bit of flexibility as long as they can use it to their own advantage, so perhaps this session won’t be so bad. Unfortunately, it doesn’t take them long to see the zero-sum game flaw and I am barraged with questions. It’s funny: you would think guys in finance would be the numerate ones, but actually, sales guys are much more so. They spend so much time working out their potential commission, they are practically mathematical geniuses.

Rupert the Rude, head of sales for one of the larger businesses, takes the lead in interrogating me. How can they reward their top performers if they don’t have any bad performers to make up the difference? What if the high performers are also high earners, because that would use up more budget? Won’t perfectly good performers get demotivated and become worse performers if they get less than target? There is nothing I can say.

These questions go unanswered. More importantly, says Rupert, if the whole company bonus budgets are a zero-sum game, and if his team are awarded higher, there is less in the pot for his own bonus. Rupert’s team start looking worried. They can see where this is going: they are in for low ratings this year. The best I can do is point out that most of his people are on a commission plan.

Back at my desk, Big Bad Boss asks how I did. I am about to say all went well, but I remember that good is no longer good enough. Excellent.